TAX WITHHOLDING Incorrectly Calculated - Subsequent PAYG Summary Issues

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  • Updated 4 months ago
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I have MAJOR ISSUES with the tax withholding in Reckon One. For the record, I have flagged this once before and never got listened too by your support team, just fobbed off and told it was a one off error, which NOW we find out it is not. A refresh of the screen is NOT the solution I have many staff who have not had the correct amount of tax withheld from their wages over the past 12 months. What this means is they owe the tax office because RECKON ONE software has not calculated the tax correctly. We SHOULD NOT HAVE TO CHECK the tax withholding each week and manually change if its wrong. This is why we are paying for a premium software. NOW, I have tried to speak to the support online again, and again, get told to refresh and manually change amounts. THIS IS NOT THE SOLUTION. I would like a response from Reckon One detailing why these amounts are not calculating and an assurance that they will be accurate in future. Your phone support team never listen and I am regretting going from MYOB to Reckon One as I now have grave concerns other areas are wrong as well, and not through user entry but Reckon ONE. Please respond to this as a matter of urgency.
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Posted 4 months ago

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Simon Hutchinson, Employee

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Hi there,

Can you please give an example of an amount you believe has been incorrectly calculated (the gross and the payg calculated) , including the way the employee has been configured, their tax status, whether they have a help debt and the amount you expected to see.

Before all our software is shipped, it is run against numerous ATO tax table reports and equations provided by the tax office to ensure the numbers match up with what the ATO expects.

You can find a example of which here

https://softwaredevelopers.ato.gov.au/sites/default/files/resource-attachments/NAT%203539%20Omnibus%...

As you can see on the sample data tabs, there is significant amounts of which the tax tables are checked against with ATO documentation. All the products do not ship unless these numbers are matching because as you rightly say compliance with the tables is important.

One thing to note, if these are casual employees, Reckon One may have used the casual daily tax table to calculate the tax


This tax table can be found here 

https://www.ato.gov.au/Rates/Tax-table-for-daily-and-casual-workers/
Cheers
Simon
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GCO Administration

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Hi have done all of this and provided over 25 examples to the phone support people. Attached is a report of one our latest pay runs which I have marked up detailing discrepancies.  I have also previously checked and again today that all staff are entered in correctly, ie, part time, medicare levy etc.  For the record our casual staff only work for us so the standard tax tables apply as they only have one job.  As you can clearly see on the attached report, Reckon is not calculating the tax correctly on all payments.  This is a problem that we have only found out about now as our staff are being told many of them have not paid enough tax due to Reckon ONE not calculating it correctly.  I was told yesterday by your online team to overide the amount and refresh my screen.  This is not a solution.  There is a problem and its dating back to September 2017 when we started using Reckon One.  Please respond as I requested a call back yesterday but surprise, I didnt get one.
(Edited)
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Simon Hutchinson, Employee

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Thanks for your response. Unfortunately the images are not entirely legible to us even when enlarged so it is hard for us to see these numbers.

This also does not tell us pay frequency, employee configuration (do they have help debt or not, are they foreign resident or not etc) which is all vital information to be able to check these numbers against the ATO tables versus what is being generated in the application.

To assist with this, it would be helpful if some of these numbers could be entered into a excel document for example as well as the employee configurations (what their tax status is, the salaries etc what you have configured in reckon one basically).

This will allow us to check the data versus the expected outcome and to see where for example a employee may be misconfigured. 

Have you compared these numbers against the ATO calculator to see if they are out? I am sure you are aware, but the income tax amount a employee is required to pay is made up of many different areas, not only PAYG which can affect whether they get a bill or not. For example, if a employee forgot to tell you via the TFN dec they have a HELP debt and they do, then they would end up with a bill at the end of the year.

From the image it looks like some of the employees have matching data to what you expect but some do not, is there anything unique about those employees which do not match in your numbers versus those that do?

With regards to casual only working for you, Reckon One still uses the casual daily tax table for those payments in certain circumstances depending on how the product is configured.

Any further information you can provide would very much help with this
(Edited)
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GCO Administration

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I am fully aware of all of the set up aspects and the requirements.  The figures are wrong and if Reckon One customer support was the slightest bit savvy they would be able to see what is happening.  You are simply making me do all the work when there is a problem with the software.  I would like a dedicated email to send the PDF too.  Furthermore, as I previously stated, all staff members are set up correctly.  Tax Withholding, Help, Employment type etc. 
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In addition, I have tried to explain, there is no reason or pattern that I can see as to the reason the amounts a varying.  It doesn't make sense. 
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Simon Hutchinson, Employee

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When an employee’s ‘Employment type’ is set to ‘casual’ in the employment page of the employee’s record and dates are entered in the ‘Date from’ and ‘Date to’ fields in the pay run, the tax calculation will work differently. When dates are entered, this triggers the tax engine to calculate tax based on ATO Tax table for daily and casual workers and not the normal tax tables.
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Lets talk about all the permanent employees... What is your reason for this?  Its still calculating wrong irrespective.  Please also answer all of my questions, this is such a fob off its unbelievable.  
(Edited)
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these examples should be clear.  Tax withheld on $1075 according to ATO tax tables should be $209.  Reckon One has calculated $141.  There are no errors with the employees set up and they have not changed since entry back in Sep 2017
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Simon Hutchinson, Employee

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Thank you for that information, it was extremely helpful to have this data. I have entered a employee in a book here with the same settings and pay date that you have placed above and have correctly had a $209 tax amount calculated. Please see below for a screenshot. I will now attempt to see what setting might be causing $141 by adjusting this employees features etc, and will let you know the outcome.


(Edited)
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Thats great its working for you.  But I have 12 entries that were wrong in the last pay run and all the crucial information is accurate, yet still it does not work in my book and the amounts are all out for no apparent reason. 
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Simon Hutchinson, Employee

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can you please (with private information blacked out) show what settings you have for this screen for the employee being not taxed at 209.

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Simon Hutchinson, Employee

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sorry i see you have provided this already.
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Simon Hutchinson, Employee

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I note that the employee is tagged as part time but works 37.1 hours in this pay slip. By chance have you adjusted this number away from 1.0 in the pay run at the bottom? This is one way i can get $141 with your settings from above.


(Edited)
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Rav, Community Manager

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GCO Administration
I have just sent you an email in relation to this thread and further investigation.

Please take a look when you can and get back to my email directly.
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no, we have not done this ever for any entries.  our part time employees do more or less hours each week.  We would never adjust this and it is default to 1 on all employees as this is how we pay, weekly.  Not 1.41 weeks....
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As per your private email I have responded.
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Rav, Community Manager

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GCO Administration,

The cause of your original problem has been identified as previously stated, and is both factual and accurate.

As per the attached screen shot and according to the ATO, casual tax on $1075 is $398, not $141 which is what Reckon One has calculated it at.
If an employee was earning $1075 on a daily basis, the tax amount is $402.
See the ATO's 2018/19 daily casual tax table HERE
(For your reference also, the ATO 2017/18 daily casual tax table is here)

As previously advised, entering from and to dates against casual & part time employees has lead to Reckon One breaking down the daily rate and calculating the tax amounts for each day and subsequently reporting on that.

Its unfortunate this has occurred, and from our part, we're going to make it clearer within Reckon One and the Reckon Training Academy workbook for Payroll to understand the implications of date fields.

What outcome are you looking for?
(Edited)
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Dear Reckon One, you have not responded to where it states we were NOT to enter in the dates.  One would assume that because we entered a too and from date Reckon ONE should not have calculated DAILY as there was more than one day.  The excuse you have used is not good enough and you have not provided a link as to where it says we should NOT enter in the dates which one would assume would be logical given the program asks you too.  Given you are not willing to accept fault in this case I will be seeking legal advice and compensation for my staff who are now faced with tax bills given we relied upon Reckon One to work and be accurate. The program is flawed and you know it.
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Furthermore, your tax table sample is NOT WHAT RECKON ONE CALCULATED.  IT CALCULATED $141 ON $1075..... WHERE DOES THIS FIGURE COME FROM ???
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Still no response
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Rav, Community Manager

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The $141.00 amount was derived by following the formula stipulated by the ATO on 
https://www.ato.gov.au/Rates/Schedule-1---Statement-of-formulas-for-calculating-amounts-to-be-withhe...
and using the Tax Tables for daily and casual workers:  
https://www.ato.gov.au/uploadedFiles/Content/MEI/downloads/Daily-casual-workers-tax-table-2018-19.pd...

We have reviewed the calculation and can confirm that the amount of $141.00 for 1075.90 earned over a 7 day period is correct.

Please note that $209 tax for $1075.90 earned is the applicable tax using the standard PAYG withholding tax rates.

We've provided all the information required to address the cause as to why this has occurred.
(Edited)
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I am waiting on a reply here.  I am to the point of seeking legal advice as I feel that this is not being handled well and the reasons provided as to why the errors are occurring are not factual or accurate.

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